the uniform law for the international sale of goods- the hague co

THE UNIFORM LAW FOR THE INTERNATIONALSALE OF GOODS: THE HAGUE CONVENTION OF 1964

JOHN HoNNoLD*

Three weeks of frenzied work in April 1964 at a diplomatic conference at TheHague brought the long-standing project to unify the rules of law for internationalsales transactions to a new and significant stage. The nations of the world are nowinvited to ratify two Conventions. One Convention would implement the UniformLaw on the International Sale of Goods (here often called "ULIS")-the older andlarger project which will be the center of attention in this paper; the other wouldestablish the Uniform Law on the Formation of Contracts for the International Salesof Goods (the "Formation" project).' At this April conference the United Statesfor the first time participated in this work. The processes of lawmaking employedat this level need to be examined, and the work product requires evaluation.

I

THE 1964 DIPLOMATIc CONFERENCE

A. Background

International affairs move with lightning speed only in war. Peacetime progresstends to be glacial, and the weight of tradition controls the general direction andrate of further movement. This, at any rate, has been true of the development of theUniform Law on the International Sale of Goods.

The history of ULIS needs to be traced to 193o, when the International Institute

for the Unification of Private Law (the "Rome Institute") established a draftingcommittee of European scholars; the committee developed a draft uniform law

* Professor of Law, University of Pennsylvania. The writer was a member of the United States dclc.gation at the diplomatic conference of April 1964 but now, needless to say, speaks only for himself.

'The texts of the Conventions and annexed Uniform Acts, in French and English, have been pub.lished under the auspices of the Ministry of Justice of the Netherlands. DIPLOMATIC CONFERENCE ON Ti1.UNIFICATION OF LAW GOVERNING THE INTERNATIONAL SALE OF GOODS, THE HAGUE 1964, TEXT OF TInt

FINAL ACT AND OF THE CONVENTIONS (,964). The English texts of the relevant documents are repro-duced, following a brief introduction by the present writer, in 13 Am. J. Comp. L. 451 (1965) and alsoinfra, pp. 425-59. The French and English texts have equal authenticity. CONVENTION RELATINO TO AUNIFoR LAw ON TH INTERNATIONAL SALE OF GOODS [hereinafter cited as SA.Es CoNVENTION] arts. 1(2),XV; CONVENTION RELATING TO A UNIFORM LAW ON THE FORMATION OF CoNTRACTS FOR THE INTERNATIONALSALE OF Goons [hereinafter cited as CoNVENTION ON FORMATION OF CoNTRACTS] arts. 1(2), XIII.

The Conventions and annexed uniform laws come into force if adopted (through ratification oraccession) by five states. SALES CoNVENTION art. X(1); CONVENTION ON FORMATION OF CONTRACTS art.VIII(l). As of February I964, the Sales Convention had been signed by The Netherlands, Italy, San

Marino, Vatican City, Greece (ad referendum) and the United Kingdom; the Formation Convention hadbeen signed by the foregoing states with the exception of the United Kingdom. Signature, of course, isnot necessarily followed by ratification. Ratification by the United Kingdom of the Sales Con-vention would presumably be subject to the reservation, sponsored by that delegation, under which theUniform Law would apply only if the parties have "chosen that Law as the law of the contract." SALES

CONVENrION art. V.

THE UNIFORM LAW ON INTERNATIONAL SALES 327

which in 1935 the League of Nations sent to governments for their comments.2 Arevised draft was completed in 1939-scarcely an auspicious year for European col-laboration. After the war, devoted scholars picked up the project; and in i95i a

diplomatic conference at The Hague, attended by twenty-one nations, gave generalapproval to the objectives of the project and appointed a Special Commission tocontinue the work.? In 1956 this Commission released a revised draft which wassent to governments for their comments in preparation for a final diplomatic con-ference to complete the draft. Many governments arranged to have the draft studied,and prepared detailed comments and recommendations for revision.4

The Commission re-examined the 1956 draft in the light of these observations, and

in 1963 released a detailed response including numerous amendments responding to

suggestions the Committee deemed meritorious? This 1963 revision of the draft was

circulated to governments in preparation for the diplomatic conference at The Haguescheduled for April i964.6 In the meantime a draft of a Uniform Law on the

Formation of Contracts for the International Sale of Goods had been prepared and

circulated to governments for their comments

The United States took no part in this preparatory work. Ours was not one ofthe forty governments who were members of the Rome Institute, the sponsoring

organization. This fact would have barred representation on the Committee that2 This committee was composed of two representatives from the United Kingdom-Sir Cecil Hurst (the

Chairman) and Professor H. C. Gutteridge; two from Sweden-Judge Algot Bagge (the only memberof this group who was able to come to the 2964 Conference) and Professor Martin Fehr; PrcfessorHenri Capitant of France; and Professor Ernst Rabel of Germany. Until his death, the most influentialmember of the drafting groups was probably Professor Rabel, whose comparative study of the lawof sales is still accepted as a primary authority. ERNEST RABEL, DAs RECHr DES WARENxAUFS (1: Z930; 11:1958). Further discussion of the background of the law and references to the original drafts and othersource material may be found in Nadelmann, The United States and Plans for a Uniform (World) Lawon International Sales of Goods, 12 U. PA. L. REv. 697 (1964); Honnold, A Uniformn Law for Interna-tional Sales, 107 U. PA. L. REV. 299 (i959).

'The Special Commission had the following members: M. Pilotti (President of The Hague Con-ference), V. Angeloni (Italy), A. Bagge (Sweden), F. de Castro y Bravo (Spain), L. Frid~ricq (Belgium),M. Gutzwiller (Switzerland), J. Hamel and A. Tunc (France), Baron F. van der Feltz (Netherlands),T. Ascarelli (representing the Rome Institute), 0. Riese (Federal Republic of Germany), B. A. Wortley(Great Britain), and P. Eijssen (Netherlands), Permanent Secretary.

'A year in advance of the diplomatic conference, thirteen governments and the International Chamberof Commerce had submitted observations totalling approximately one hundred printed pages. OaSFvA-TIONS OF GOVERNMENTS AND OF THE ICC ON THE DRrT UNIFORM LAW ON THE INTERNATIONAL SALE orGooDs (x963) (Doc./V/Prep./2) [hereinafter cited as OBSERVATIONS Or GOVaER, ENTS]. The symbolsin parentheses were part of a system for identifying conference documents; other similar references hereinwill relate to other documents presented at the conference. All such documents have been preparedand distributed by the Special Commission appointed by the Hague Conference on the Sale of Goods,Permanent Secretariat: Ministry of Justice, The Hague; the Permanent Secretary is Mr. H. E. Scheffer.This and other documents were published initially in French; English translations of some were availableshortly before the opening of the conference.

'NOTE or THE SPECIAL CoMMnISSION ON TIE OBSERVATIONS PRESENTED By VARIOUS GOVERNMENTSRELATING TO Tm DRAFT OF A UNIFORM LAw ON INTERNATIONAL SALE Or GooDs (1963) (Doc./V/Prep. 3)[hereinafter cited as SPECIAL CoaaISSioN NOTE ON GOVERNMENTAL OBSERVATIONS].

o DRAFT Or A UNIFORM LAw oN INTERNATIONAL SALE or GOODS (1963) [hereinafter cited as SALESDRAFT OF 1963].

7 See Farnsworth, Formation of International Sales Contracts: Three Attempts at Unification, 110 U.PA. L. REV. 305, 306-307 (1962).

LAW AND CONTEMPORARY PROBLEMS

produced the various drafts but would not have precluded a response to the above-described request for observations on pending drafts. However, no response wasmade, nor was there any other sign of interest in the project.

. Then, on the eve of The Hague Conference, a remarkable change occurred. InDecember 1963 (four months before the Conference) Congress enacted legislationauthorizing United States membership in the Rome Institute.' The State Depart-ment hastily organized a delegation to represent the United States at the diplomaticconference, and requested the delegates to analyze the pending drafts.9 A memo-randum commenting on the proposed Sales draft was transmitted to the Conferenceas Observations and Amendments submitted by the United States of America. Thismemorandum was received at The Hague just in time to be translated into Frenchand to be incorporated into the mass of working papers which awaited the delegateson their arrival.' 0

B. The Conference

For this participant, impressions of the Conference are a mottled montage ofexaltation, exhaustion and despair. An introduction to the procedures and problemsof the Conference may be useful in evaluating the uniform laws that emerged, inpreparing for future conferences, and in considering alternative routes towards uni-fication.

The assignment facing the Conference was staggering. The Uniform Law onthe International Sale of Goods, a long and complex law of over one hundredarticles, needed to be revised and drafted finally in two languages. Similarwork had to be done for the Uniform Law on the Formation of Contracts. Interna-tional conventions to implement these laws had to be prepared. All this in threeweeks! 1

The available time would scarcely have been sufficient for final work on only onelaw on which the important substantive decisions had already been reached, so thatthe assignment would be confined to final polishing by a small professional groupoperating within a single legal tradition and speaking a common language.

None of these ingredients was present. In spite of the decades during which theSales draft had been pending, the delegates did not work from the premise that

877 Stat. 775 (1963), 22 U.S.C. § 269 (1964). This law also authorized membership in The

Hague Conference on Private International Law, a permanent organization at The Hague devotedto problems of conflict of laws.

9 Members of the United States delegation were: Richard D. Kearney, Deputy Legal Adviser, Depart-ment of State; John N. Washburn, Attorney, Office of the Assistant Legal Adviser for Treaty Affairs;Joe C. Barrett of Jonesboro, Arkansas, and James C. Dczendorf of Portland, Oregon, Commissioners onUniform State Laws; and Professors Soia Mentschikoff and John Honnold.

To help in planning the Government's new relationship with the Rome Institute and the HagueConference on Private International Law, in February 1964 the Secretary of State established an AdvisoryCommittee on Private International Law.

"°Doc./V/Prep. 8 (1 Feb. x964); Compilation of the Observations and Amendments, Submitted bythe Governments and the International Chamber of Commerce (Conf./Gen./5).

"I The Conference could hardly have been longer; the schedules for government officials and busyspecialists (as well as the budgets of the governments-especially that of the host country) were subjectedto heavy pressure by a conference of three weeks.

THE UNIFORMi LAw ON INTERNATIONAL SALES

agreement had been reached on the major substantive provisions. The diplomaticconference of 1951 (which met on the Sales draft for ten days) did not come to grips

with most of the important substantive provisions of the Sales draft: the main issuesat that stage were the advisability of the project and a few questions as to general

direction. Inevitably, the 1964 Conference did not regard these tentative decisions asbinding. The circulation of the 1956 draft to governments and the consideration of

their varied replies by the drafting committee could not produce a consensus. Con-sequently, the delegates arriving at die Conference were presented with massive

governmental memoranda proposing large numbers of significant amendments;'"as the deliberations proceeded, further amendments rolled off the mimeographingmachines (in two languages) at an accelerating tempo.

Following the opening sessions, the large Conference divided, in effect, intoseparate conferences-on the Sales draft, the Formation draft, and the implementing

Conventions. Of these, the largest group-with over fifty delegates in attendance-devoted itself to the Sales draft; this conference met for the larger part of nearly

every day in the medieval grandeur of the Hall of Knights under vaulted arches

and stained-glass windows in the presence of the throne from which the Queen of

the Netherlands convenes the Parliament."The first step in the process was discussion of each of the 113 articles of the Sales

draft. As each article was called up for discussion, representatives of different govern-ments would offer their criticisms or observations, and call attention to the amend-

ments they were proposing. Often the draftsmen would reply-usually through the

brilliant and graceful eloquence of Professor Tunc of Paris who (as he put it) wascast in the role of Defender of the Faith.

At the end of the day's discussions one or more working groups of a dozen or sowould be constituted to try to reconcile conflicting views and to prepare a written

report either recommending that the original draft be approved, or proposing an

amendment (or alternative amendments) for action by the conference. Sometimes

the working group would come to a decision in an hour or two of discussion between

the end of the afternoon session and a late dinner hour; two members of the group(one French-speaking, one English-speaking) would undertake the task of writing

a report setting forth the group's recommendation on each section and the language

of any proposed amendment.14 These duties had to be performed in time stolen1' Extensive memoranda proposing a substantial number of amendments were submitted at the outset

of the Conference, inter alia, by the Netherlands (Doc./V/Prep./4); the Federal Republic of Germany(Do./V/Prep./i5); Austria (Doc./V/Prep./ii); Israel (Doc./V/Prep./17); Hungary (Doc./V/Prep./18). Numerous additional proposals for amendment were generated in the course of the Conference.

1 3 Technically these separate groups were termed "committees" and final votes were reserved for theplenary "conference." The size and procedures of these divisions of the plenary session make it advisableto refer to them as the "Sales Conference" and "Formation Conference" to distinguish them from thenumerous smaller committees.

1, Some working groups labored for several days, and one notable group worked throughout mostof the Conference on the vexing problems of the relationship between the rules on applicability of theUniform Laws and established principles (and treaty obligations) on choice of law.


from the hours before and after the large sessions devoted to the on-going discussionof further sections of the law, and at the cost of time needed to prepare for thelarger sessions by studying the proposed provisions and the ever-increasing volume ofgovernmental memoranda, proposing additional amendments. Shortly, the dailypile of new documents began to include the reports of the various working parties;the conference then had to interrupt its forward motion to debate and vote on thesereports concerning sections that had already been given preliminary discussion.

The frenzied labors of the large staff of translators, typists and mimeograph op-erators brought these memoranda to the delegates in a constantly-swelling stream.In scenes reminiscent of the Sorcerer's Apprentice, staff members kept making therounds during the sessions, depositing more and more memoranda on the thick stackof material that had been produced during the night. Each delegate responsiblefor discussion and voting needed a full-time assistant just to sort the incomingdocuments and produce them at the crucial moment in the debates and voting.Only a few of the delegations had such help; certainly the United States delegationdid not. If anyone imagines that there was time to read-let alone study-all of therelevant material, I have failed to communicate the volume of the material andthe tempo of the proceedings.

Then, for some, a new and crushing demand arose: the Drafting Committee.The amendments brought in by the working parties had often been hastily writtenby delegates who were both hungry and tired; the most one could hope was thatthese drafts and accompanying memoranda would catch the sense of the proposal-certainly it was impossible for the working parties to prepare new sections thatfit the style and structure of the draft. A larger problem was the need for a finaldraft in English. Shortly before the opening of the Conference, an English transla-tion of the French text became available; it was a useful document, but it had beendone hurriedly and required substantial reworking. In any event, it soon becameobsolete.

This work was assigned to a Drafting Committee of five. Three had beenmembers of the Special Committee that in the preceding years had preparedthe Sales drafts: The Chairman, Mr. Van der Feltz of Holland, Professor Rieseof Germany, and Professor Tunc of France. The United Kingdom contributeda highly skilled draftsman in Mr. Evans, Deputy Legal Adviser to the ForeignMinistry. The United States, in spite of its late arrival on the scene, was givena chair on the Drafting Committee-a generous expression of desire for our interestin the project which was not an unmixed blessing, for it depleted the manpowerof a woefully understaffed delegation."

During the final two weeks, the Drafting Committee worked almost every

"5 The present writer was named the fifth member of the Drafting Committee. The assignment of adelegate from the United States to this committee had the unfortunate effect of excluding representationfrom the Scandanavian countries; these countries had played an important part in the project from itsvery inception and sent delegates to the Conference of high quality and thorough preparation.

THE UNIFORm LAW ON INTERNATIONAL SALES

available hour when the large committees or plenary sessions were not in session,and late into the night. (One session until three in the morning is particularlymemorable.) The quality of the final product was conditioned by several factors: thefrenzied pace, calling for the spot-drafting of provisions in two languages, with nomore than a half-hour or an hour for most sections; 6 accumulating fatigue, withits toll in precision and creativity; and scant opportunity for review, let alone re-flection, on the product.7 As the reader will soon see, the draft posed basic problems

of approach and structure. But in view of the shortage of time and the large numberof ad hoc amendments, it became evident that any basic re-examination of the draftwould have barred completion of the project during the Conference; the most thedraftsmen could hope was to work the amendments being produced by the Con-ference into the existing structure with a minimum of egregious error." The effectproduced by this hasty work was, I believe, disappointing to all. Many delegatesused to meticulous legal work were dismayed; I shall not soon forget the look offriendly reproach by a particularly esteemed delegate as he looked up from readingone of our offerings.

Why, then, did the Conference deem the work finished and offer the productto the nations of the world for ratification? The line of argument that carried theday included these points: Over three decades had gone by since this project was

started-the time had come to bring the work to fruition. Certainly the UnitedStates, after ignoring the work for three decades, was in no position to ask for moretime-at least without giving solid assurance of favorable consideration of a reviseddraft; no one was in a position honesdy to give such a commitment. Moreover,the government of The Netherlands, having borne the enormous burden andexpense of arranging this Conference, could not be expected to repeat this heavycontribution, and another sponsor was not on the horizon. And could one be surethat more time and work and another diplomatic conference would produce a betterproduct? Surely even those who were most disappointed in some of the provisionsof these Uniform Laws must recognize that they would improve the sorry legal

"' There even were problems of reconciling legal terminology and drafting style between the English

and American languages-a fact that could not escape amused comment by our continental colleagues.For a "case study" of the Convention and further comments on some of the problems of drafting inparallel languages see Tunc, Les Conventions de La Haye du let ]uillet z964, [1964], REvUE INrE-NATIONALE Di DROIT CO.PARA 547.

"TThis one Drafting Committee also had to do the final work on the Uniform Law on the Forma-tion of Contracts for the International Sale of Goods, and the two implementing conventions. But thebrevity of these documents permitted the committees to turn out relatively finished products requiringmuch less attention by the overall Drafting Committee.

"The final working stage of the Conference was in the form of a report of the Drafting Committee;a plenary session moved rapidly through the Committee's offering of uniform laws on Sales and onFormation, and a Convention to implement each law. In some instances sections were recommitted tothe Drafting Committee for further attention; midnight repairs having been made, a further version wasreturned to the Convention for its final approval. The last significant event before adjournment wasthe signing of the Final Act of the Diplomatic Conference. The United States and nearly all of theother governments in attendance at the Conference signed this Final Act, which comprised a detailedrecital of the events of the Conference; this signature, of course, does not involve any obligation toratify the conventions prepared at the Conference.


situation confronting trade, which must cope with national laws antique and un-suited to international transactions, unintelligible to traders from different legaland linguistic backgrounds, and subject to the vagaries of the conflict of laws.

Thus we face the age-old choice between keeping the bird in the hand (takenafter a generation of effort) or taking to the bush in hope of better game. Thiscalls for inspection of the bird we have.

II

THE UmFoRM LAw

A. The Law's Reachi. The international sale. ULIS takes a more restrained approach than the

Uniform Sales Act, the Uniform Commercial Code, and the Geneva conventions onbills of exchange and promissory notes-all of which seek unification by governingthe total body of law of the enacting jurisdictions' The nations of the worldcould not be expected to attach their domestic sales law as a tail to the internationalkite; it was therefore necessary to sort out the international sale for separate treatment.

The Uniform Law's definition of the international sale, as embodied in the 1956draft, has been examined elsewhere and need not be given extended treatment here;the final version closely follows the 1956 draft except for the deletion of those partswhich the earlier discussion found to be ambiguous and unnecessary20 It should beenough to mention that ULIS applies only to transactions that have a double inter-national aspect-with respect to both the parties and the sales transaction. Thus, asale by an American seller to an American buyer for the shipment of goods to

"9 See Hudson & Feller, The International Unification of Laws Concerning Bills of Exchange, 44 HAav.

L. REV. 333 (1931). Similarly pervasive unification in many fields, including the law of sales, hasbeen established among the Scandanavian countries. See INTERNATIONJAL INSTrruTE FOR Tur- UNIFICATIONOF PVATE Lw, 1948 UNIFireATze OF LAw, 270-83, 321. Similar unification of the law of saleswithin the continent of Europe has not been seriously urged-probably because it is so closely relatedto the structure of the law of obligations which is subject to significant differences, particularly betwccnthose legal systems influenced by the French code and those influenced by the German code.

2"Honnold, A Uniform Law for International Sales, 107 U. PA. L. REV. 299, 304-310 (1959). Asapproved in 1964, the crucial provision on the scope of ULIS is the following language of article x, para-graph x:

"x. The present Law shall apply to contracts of sale of goods entered into by parties whose placesof business are in the territories of different States, in each of the following cases:

"a) where the contract involves the sale of goods which are at the time of the conclusion of thecontract in the course of carriage or will be carried from the territory of one State to the terri-tory of another;

"b) where the acts constituting the offer and the acceptance have been effected in the territories ofdifferent States;

"c) where delivery of the goods is to be made in the territory of a State other than that withinwhose territory the acts constituting the offer and the acceptance have been effected .... "

In the r956 draft, the provision corresponding to paragraph x(a), above, included as internationaltransactions contracts which implied that the goods .'had been carried" from one state to another. Fordifficulties posed by this language, see the above-cited article at 309. The 1956 draft in article 8 alsoprovided for the coverage of certain local transactions preceding or following an international sale.Difficulties of administration latent in this provision were discussed in the same article at 309-310. Bothprovisions were deleted from the final draft in response to objections made by the United States andother delegations to the diplomatic conference.

THE UNIwommf LAw ON INTERNATIONAL SALES 333

Germany would not be covered, since the parties are not international. Conversely,a sale negotiated by an American seller to a French buyer, in spite of the inter-national character of the parties, would not be governed by ULIS if the transactionarose from negotiations in the United States and the goods were to remain here. Inshort, ULIS, as revised, prescribes a definition of the international sale of modestscope and acceptable clarity. Difficult borderline problems, of course, can arise,but the typical international sale is clearly covered, and the area of doubt at thefringes is small in comparison with that involved in the operation of rules of choiceof law. Moreover, if a transaction falls within a twilight zone, the parties can agreeto exclude or to apply the Uniform Law.2'

2. Rejection of conflicts rules for law of forum. The Uniform Law, however, has

a less modest aspect. Let us suppose that a seller in the United States and a buyerin Canada are parties to an international sales transaction; neither Canada northe United States has adopted the Uniform Law but Germany has. For this situa-tion, ULIS prescribes the following remarkable result: If one of the parties can getjurisdiction over the other in Germany, the German court is directed to apply theUniform Law, although the transaction had no relationship to Germany or anyother adopting state. This example, although extreme, is far from impossible, sinceconcerns engaged in international trade may have assets in an adopting state (Ger-many in the above example) and thus be subject to the jurisdiction of a court gov-erned by the Uniform Law's broad rules for self-application. These same rules canbe expected to have frequent application in trade between adopting and non-adopting states. Thus, assuming that Germany has adopted ULIS but we have not,in all sales from the United States to Germany or from Germany to the United States,a German court would be directed to apply ULIS, without regard to general prin-ciples of choice of law.

This wide reach for jurisdiction results from the combined effect of two pro-visions. Article i states that the parties and the transaction have the necessary inter-national ingredients if they involve "different States" (without regard to whether

either State has adopted the Uniform Law). And Article 2 provides: "Rules ofprivate international law shall be excluded for the purposes of the application ofthe present Law... "' This approach was deliberately chosen at an early stage of

the drafting process and was defended stoutly at the diplomatic conference as ameans to extend the benefits of ULIS and escape the chaos of conflicts rules. Amove to narrow the reach of the Uniform Law, led by the United Kingdom, theScandanavian countries and the United States, failed by an equally divided voteY2

-1 ULIS art. 3: "The parties to a contract of sale shall be free to exclude the application thereto of

the present law either entirely or partially. Such exclusion may be express or implied." Under the1956 draft (article 6) a much heavier degree of explicitness was required for displacing the provisionsof the Uniform Law.

ULIS art. 4 provides that the Uniform Law may be "chosen as the law of the contract by the parties"without regard to their international character.

2- See Report of the Commission accompanying the 1956 Draft (Doc./V/Prep. 1) 21. The working


These provisions have already produced astringent comment from specialists inconflicts of law who are not convinced that the values of a "modern" and "good" lawunderstood by the forum outweigh the evils of jockeying for a forumn with afavorable rule; 3 the debate echoes the controversies that exploded on the appearanceof similar (but less greedy) provisions in the 1952 draft of the Uniform CommercialCode

4

A full evaluation of the argument needs to be put in a larger setting of aphilosophy about choice of law, and cannot be attempted here. There is roomfor only brief comments of a practical sort. First: A nation with enthusiasm for theUniform Law is not readily deterred from adoption even by strong arguments thatthe Law's reach is excessive, for these difficulties will be deposited on the doorstepsof nonadopting states2 Second: If the ULIS once goes into effect through adoptionby five states, the rest of the world cannot forget about this Law-a consideration thatsurely was not overlooked by the sponsors. One now feels the force of this secondconsideration, for the possibility that the Uniform Law will be applied willy-nillyto our international sales makes it important to become acquainted with the UniformLaw.

But first we must face this question: What should such a uniform law try to do?

B. Function of a Uniform Law for Sales

There is something peculiar and elusive about sales as subject for statutory rules.This special elusive quality comes from the fact that nearly every "rule" of saleslaw yields to the parties' intent. The power of the parties over the law of theirtransaction is complete within the area covered by the Uniform Law for InternationalSales, for ULIS does not touch the rights of third parties-whether they be creditors,

party on the problem of scope worked throughout most of the Conference, and made its reportto the assembly in an eloquent forty-minute exposi by M. Bellet-a performance rewarded by spontaneousapplause and the successful vote described in the text.

" Nadelmann, The Uniform Law on the International Sale of Goods: A Conflict of Laws Imbroglio,74 YALE L.J. 449 (1965); de Winter, Loi Unijorme sur la Vente Internatlionale des Objets MobiliersCorporels et le Droit Internationale Privi, i Nars. INT. L. REv. 271 (x964).

"4 Burton, The Uniform Commercial Code and Conflict of Laws, 9 Am. J. CosNP. L. 458 (196o);Goodrich, Conflicts Niceties and Commercial Necessities, [1952] Wis. L. REv. 199.

"5 The direction on choice of law that ULIS gave to the courts of adopting states is inconsistent withthe rules of the Convention on the Law Applicable to the International Sale of Goods, which has beenratified by Italy, Belgium, France, Denmark, Norway and Sweden-more than the five ratifications needed;it went into effect on September x, 1964. See de Winter, supra note 23, at 276; Nadelmann, supra note23, at 452. To meet this problem, article IV of the Sales Convention provides: "i. Any State which haspreviously ratified or acceded to one or more Conventions on conflict of laws in respect of the interna-tional sale of goods may, at the time of the deposit of its instrument of ratification of or accession tothe present Convention, declare by a notification addressed to the Government of the Netherlands thatit will apply the Uniform Law in cases governed by one of those previous Conventions only if thatConvention itself requires the application of the Uniform Law... ." A similar opportunity for a reserva-tion is made in article IV of the Convention on Formation of Contracts.

These Conventions only allow for such reservations by States that have "previously" ratified such aconvention on conflict of laws; States that first ratify one of the Conventions on Uniform Law may beunable subsequently to ratify the conventions on choice of law.

THE UNIFoRui LAW ON INTERNATIONAL SALES

security-holders, or prior owners. 6 Nor is there any attempt to make rules to aidthe weak or ignorant or inattentive, like the rules of the Sales Article of the UniformCommercial Code invalidating "unconscionable contracts" and outlawing certainforms of words for the disclaimer of warranties. 7 These problems, for the most part,remain subject to national law.2s

A second difficulty for the draftsman is the almost infinite variety of sales trans-actions. If transactions in goods were as stereotyped as transactions in checks, legalrules could be stated with considerable definiteness. But sales of goods come inendless shades and patterns. Important consequences turn on the nature of thegoods (prices fixed or fluctuating, purchased for resale or for use, etc.), the distanceand type of transport, and the relationship between the parties-to mention only afew of the factors that make this a difficult and fascinating subject.

Within this complex universe of trade, as we have seen, the parties can have thetransaction as they want it. Many of their expectations will have been expressed;others can be implied from the course of their prior dealing or from the usage of thetrade. Where no such expectation has been expressed, what is the function of astatute? In some aspects statutory provisions bear an uncomfortable relationship torules of statutory construction. In both, the ideal is to divine the intent of others.In both, an attempt at precise rules of construction interferes with a sensitive responseto the precise problem at hand.

The discussion that follows may be useful to test a series of hypotheses: (i) Thereare a few important issues on which a unifying statute needs to declare a generalpolicy or approach. (2) On most problems of sales law, complex and detailedstatutory provisions are unnecessary and may be dangerous. (3) If the uniformstatute avoids harsh technicalities, the Law's greater contribution will not be whatit says but what it becomes-a common language and referrant for a developingjurisprudence that one day could constitute an international law merchant.

Since it would be cumbersome (and dull) to survey the entire Uniform Law, itsprovisions will be sampled and those hypotheses examined in connection with itsrules on quality of the goods, risk of loss, and remedies for breach.

" ULIS art. 8: "The present Law shall govern only the obligations of the seller and the buyerarising from a contract of sale. In particular, the present Law shall not, except as otherwise expresslyprovided therein, be concerned with the formation of the contract, nor with the effect which the contractmay have on the property in the goods sold, nor with the validity of the contract or of any of itsprovisions or of any usage."

ULIS art. 52 sets forth the seller's obligation where "the goods are subject to a right or claim of athird person . . ." but the validity of the claims of third persons is left to local law. The Uniform SalesAct § 26 similarly accepted preexisting non-uniform law on whether seller's retention of possession is infraud of his creditors; Cf. UCO § 2-402(2).

5 7 UCC §§ 2-302, 2-316; Contrast ULIS art. 8, quoted in note 26 supra.58 In view of ULIS art. 8, a party could have recourse to applicable national law invalidating the

agreement because of fraud. On the other hand, the Uniform Law after stating seller's obligations as toconformity of the goods (art. 33) adds that these rights "exclude all other remedies based on lack ofconformity of the goods." ULIS art. 34. The important rules of UCO 2-316 on disclaimer of warrantiesappear to be guides for the interpretation of the contract, and thus (unlike the Code's rules on "un-conscionability") would be displaced by ULIS. Cf. ULIS arts. 3, 17.

LAw AND CONTEMPORARY PROBLEMS

C. A Sampling of the Law's Provisions

i. Quality of the goods. What should the Uniform Law say about the qualityof goods the seller must supply under the contract? Some general comments ofan obvious sort may help to lay a foundation for later examination of the variationsin draftsmanship demanded by different aspects of the law of sales.

The first observation is that expectations of the parties about the quality of thegoods are real and central to the transaction. We shall shortly have to ask whetherthe same is true of risk and remedies. But as to the quality of the goods there canbe little doubt: one becomes dizzy trying to imagine a sales transaction without areal and specific expectation about the quality of the goods, although many of thoseexpectations (steel beams without cracks; a lathe that turns) may be so obvious thatthey "go without saying."

In view of this, one might ask why it is necessary to have "rules" on how to con-strue this aspect of sales contracts when the meaning of other transactions must befound without such guides. The question (at least for me) is both intriguingand difficult. Perhaps in the law of "warranty" we have a permanent legacy ofartificial tools devised to cope with an instance of cultural lag. Early courts, condi-tioned by the traditions of a static land economy where changes in relationships wererare and to be taken with caution, perhaps needed a nudge to realize that most salestransactions were made rapidly without the articulation of some of the most im-portant expectations of the parties.

Whatever the cause, British codification seized on technical distinctions inthe developing case law to erect separate "types" of warranties-"fitness for purpose"and "merchantable quality."'2 The Uniform Law followed the same structure-smoothing away some technicalities and adding others;a° and the Uniform Com-mercial Code has preserved the same structure, with its own refinements and com-plications3 l

The Uniform Law on International Sales defines the seller's basic obligation as toquality in a manner that is similar to our customary "warranty" law-with perhapssome gain in unity and coherence. The most attractive feature of this part of ULISis the simple, but powerful, general rule that the goods must "possess the qualitiesand characteristics expressly or impliedly contemplated by the contract."32 Thislanguage seems just right to direct attention toward the crucial issue-the construc-

"' British Sale of Goods Act §§ 14(1) (fitness for purpose); 14(2) (merchantable quality). On theother hand, a more unified approach could have been derived from Judge Brett's opinion in Randall v.Newson, 2 Q.B.D. 1o2 (C.A. 1877).

"°USA §§ 15(z) (fitness for purpose), 15(2) (merchantable quality)." UCC § 2-314 (merchantable quality), 2-315 (fitness for purpose). The Code, happily, sloughed

off the "by description" technicality attached to the warranty of merchantable quality, and the "patentor other trade name" qualification attached to the warranty of fitness for purpose. On the other hand,the Code created difficulties by its complex definition of "merchantable" quality in UCC § 2-314(2). SeCJOiN HONNOLD, SALES AND SALES FINANCING 74-75 (2d ed. 1962).

5ULIS art. 3 3 (z)(f).

THE UNiFopm LAw ON INTERNATIONAL SALES

tion of the contract-and to help tribunals move beyond the incomplete articulationof complex expectations to the rich overtones of the transaction in its commercialsetting.

These few words might have sufficed. However, such a laconic disposition of alarge subject would have left many Anglo-American lawyers breathless and un-satisfied. Consequently, it is perhaps wise that ULIS adds further words to elaboratethe theme, in providing that goods must possess the qualities "necessary for theirordinary or commercial use," and also "the qualities for some particular purposeexpressly or impliedly contemplated by the contract"-obligations expressing theessence of our implied warranties of merchantable quality and fitness for purpose.33

In defining the seller's obligation as to conformity of the goods the UniformLaw adds one important qualification not articulated in our law. Article 33(2)provides: "No difference in quantity, lack of part of the goods or absence of anyquality or characteristic shall be taken into consideration where it is not material."To avoid confusion in analysis (at some risk of confusion in presentation) it mustbe understood that this is not a rule remitting buyers to damage-recovery rather thanrejection; the Uniform Law has separate provisions on rejection of the goods. Weshall examine these provisions later, and find that the buyer is given broad powerto reject goods that fail to conform. 4 The scope of the above-quoted provision ofArticle 33 is controlled by the fact that this is a rule on whether the seller has"fulfilled" his obligation to deliver conforming goods. Hence, any deviation as toquality or quantity could hardly be dismissed as "not material" if it would call forcompensation in damages. Thus, defects in a very few items in a large shipmentcould be "material" if the buyer has paid for the larger quantity, or if the sellerdemands full payment for the defective goods. On the other hand, if the markethas not risen, such a deviation may not be "material" if the seller bills only forthe quantity of conforming goodsY5 Other interesting applications of the principlecould arise, but the leeway allowed the seller is necessarily small! 6

In conclusion, the provisions of the Uniform Law dealing with conformity of thegoods are far from startling, are consistent with ideas on which our law is based,and are reasonably clear. Certainly they could provide a workable structure for thedevelopment of international mercantile law much less beset by uncertainty than thechaos resulting from doubt over which system of law is available and the difficulty

" ULIS art. 33(1) (c) and (d). This provision also (perhaps with unnecessary but harmless detail)articulates the obligation to deliver the quantity of goods specified in the contract and the obligation thatthe goods conform to a sample or model (paragraphs i(a) and (c)).

"l See infra at notes 63-65. As we shall see, buyer's rights to reject for non-conformity of the goods(ULIS arts. 41, 43-44) is much stronger than for deviations from contractual obligations as to time andplace for delivery (ULIS arts. 26-27, 30-32).

"Even if a shortage (or excess) of quantity or quality is "material" buyer's right to reject willprobably be limited to those goods that are defective, or to the excess in quantity. ULIS arts. 45, 47.

" The limited leeway provided by ULIS art. 33(2) may be comparable to decisions under § 1z of theUniform Sales Act that some statements in a contract may not be express warranties if the buyer did not"purchase . . . the goods relying thereon." See Honnold, Buyer's Right of Rejection, 97 U. PA. L. Rv.457, 469-470 (1949).


of understanding the local legal idioms and traditions with which most national legalsystems have become encrusted.

2. Risk. Do statutory rules on risk of loss perform the same function as ruleson conformity of the goods? Comparing the rules in these two fields may providean approach that will be useful for evaluating the Uniform Law.

Analytically, risk of loss is closely related to the seller's obligation concerning thequality of the goods. ULIS brings this point out clearly: "Whether the goods arein conformity with the contract shall be determined by their condition at the timewhen risk passes."37 Moreover, the contract may specify the point at which riskpasses, or may use a trade term which embodies understandings as to the passageof risk.

On the other hand, the passage of risk is not so central to a real intent or expecta-tion by the parties as is the quality of the goods. Although it is difficult to conceiveof a sales contract without a real expectation concerning the kind and quality of thegoods, the same is not true of risk. Casualty to goods is infrequent, and even thenthe loss will often be borne by the carrier (especially in maritime shipments) or byan insurer under a policy carried by one or both of the parties. This protection mayresult from routine business practice rather than from a bargain over who wouldhave the burden of securing the policy and pressing a claim. Such problems thatare not central to the bargain and that seldom cause trouble may be ignored in thehasty exchange of cables in a fast-moving international transaction; there is need fora case-decider. The rule may be as arbitrary as a rule of the road-so that each partycan readily know whether he has the burden to salvage damaged goods and press aclaim against carrier or insurer. If, in addition, the statutory rule can minimize wasteand encourage efficiency in distribution, so much the better.

At this point we are entering difficult and contested terrain. Does the UniformLaw deal adequately with the problem of risk by giving a short answer to thisgeneral question: When the contract is silent, do transit risks fall on the seller or onthe buyer?

This is about all that the British Sale of Goods Act tells us. In the absence of anagreement to the contrary, risk passes when "in pursuance of the contract, the sellerdelivers the goods to the buyer or to a carier ... for the purposes of transmission

to the buyer. . . ." The Uniform Sales Act adopted this general rule that buyer

bears transit risks, but the draftsman added an ill-fated refinement: seller retains therisk of loss whenever "the contract to sell requires the seller to deliver the goods to the

S7ULIS art. 35(). This starting point, students soon learn, is implicit in Amercian sales law, andperhaps in any system of risk-allocation. ULIS gains a bit of clarity by articulating the basic premise.

as British Sale of Goods Act § 8, Rule 5(2). The quoted language is framed in terms of "appropria-

tion" of goods to the contract; this leads on to passage of "property" which in turn transfers risk. (Theinternational sale usually need not be concerned with the complications that arise when the contractrelates to "specific" goods.) The quoted language is subject to a further qualification-that the seller"does not reserve the right of disposal." This refinement has proved troublesome, and was rejected bythe Uniform Sales Act. Uniform Sales Act §§ 19 Rule 4(2), 20(2), 22(a).

THE UNIFoIum LAW ON INTERNATIONAL SALES 339

buyer ... or to pay the freight or cost of transportation to the buyer. .. 1."39 This

refinement proved to be particularly unfortunate as applied to foreign trade, for themost common forms of price quotation, "C. & F." and "C.I.F.," while allocatingtransit costs to seller, nonetheless were understood as not interfering with the passageof transit risk to the buyer.

There were practical reasons for this mercantile custom of shifting transit risksto buyers. Damage in transit normally is disclosed only when the goods havearrived at their destination, when they are near the buyer and very far from theseller. The buyer thus is in a better position than seller to ascertain the scope ofthe damage, present proof of loss to the insurer, and redispose of the damaged goods.In some instances, the buyer will have paid for the goods before arrival; the docu-ments he obtained on payment would normally include a policy of marine in-surance "for account of whom it may concern" and this protects the buyer againstloss. American cases gave effect to this mercantile understanding in spite of theabove-quoted qualification added to the Uniform Sales Act.40 We would, ofcourse, have done better with the simpler general rule of the British Act.

The approach of the Uniform Law on International Sales closely resembles thatof the British Act. ULIS Article 97-i provides this general rule: "The risk shallpass to the buyer when delivery of the goods is effected in accordance with theprovisions of the contract and the present Law."

Since risk passes on "delivery," the crucial question is the definition of that term.Article i9 provides:

i. Delivery consists in the handing over of goods which conform with thecontract.

2. Where the contract of sale involves carriage of the goods and no otherplace for delivery has been agreed upon, delivery shall be effected by handingover the goods to the carrier for transmission to the buyer....

The basic provisions of the Uniform Law on risk in transit boil down to thesevery few words: risk passes on seller's "handing over the goods to the carrier fortransmission to the buyer"--an approach, as we have seen, which is similar to boththe British Sale of Goods Act and the Uniform Sales Act.41

How does ULIS compare with the Uniform Commercial Code? Putting asidefor the moment questions of style, significant similarities are revealed. Both rejectthe "property" concept for approaching risk and other legal problems. Both tendstrongly to allocate risk to the seller so long as he is in possession of the goods-a choice strongly supported by the fact that one in possession is in the better position

"Uniform Sales Act § i9 Rule 4(2) and Rule 5."0 E.g., Smith Co. v. Marano, 267 Pa. 107, 11o Ad. 94 (1920).

"For special provisions dealing with the appropriation of goods to the contract, see UIlS arts.19(3), 98(2), zoo. By avoidance of the concept of "property" ULIS is considerably more terse andclassic than even the British Act or the Uniform Sales Act. On the other hand, its use of the artificialconcept of d/livrance created new difficulties. See infra at note 78.


to guard against loss and provide insurance.42 Both ULIS and UCC have strongprovisions throwing the risk on a party in breach of contract.4 3 Finally, and mostimportant, the Code also works from the basic presumption that risk in transitfalls on the buyer: unless the contract provides otherwise, "the risk of loss passesto the buyer when the goods are duly delivered to the carrier."4 These points com-prise the major issues of substance; and on them, the UCC and ULIS take the sameor a similar stand.

There is, however, an enormous difference in style. The UCC is not content tostop with a short presumption about risk in transit, and provides several pages ofstatutory text (elaborated by several more pages of Official Comment) on the im-plications of using specified trade terms including "F.O.B.," "F.A.S.," "C.I.F.," "C. &F.," "Net Landed Weights, .... Payment on Arrival," and "Ex-Ship."' 4

For example, if the parties use the term "C.I.F.," the Code states that they mean,inter alia, that the seller, at his risk, shall "put the goods into the possession of acarrier at the port for shipment" and "obtain a negotiable bill or bills of lading cover-ing the entire transportation to the named destination," and "load the goods andobtain a receipt from the carrier (which may be contained in the bill of lading) show-ing that the freight has been paid or provided for"; the seller shall also

obtain a policy or certificate of insurance, including any war risk insurance, of a kind andon terms then current at the port of shipment in the usual amount, in the currency of thecontract, shown to cover the same goods covered by the bill of lading and providing forpayment of loss to the order of the buyer or for the account of whom it may concern; butthe seller may add to the price the amount of the premium for any such war riskinsurance....

In addition, the seller shall "prepare an invoice of the goods and procure any otherdocuments required to effect shipment or to comply with the contract," and "forwardand tender with commercial promptness all the documents in due form and with anyindorsement necessary to perfect the buyer's rights."4

In this last paragraph the writer was not carried away by a delusion that readerswould be fascinated by the quoted statutory language; the tedious recital was designedto contrast the approach of the UCC with that of ULIS, which is silent on all the

" ULIS implements this policy more forcibly than does the UCC by rejecting any qualifications basedon whether the seller is a "merchant." See UCC § 2-509(3).

" UCC § 2-5io; ULIS arts. 19(), 97(2).

"UCC § 2-,o9(X)(a). However, this provision is subject to exception if the contract requires theseller "to deliver" the goods at a particular destination. See also UCC 2-5o9(i) (b). The quoted languageunhappily opened up the possibility that an obligation to bear freight expense would be construed as anobligation "to deliver." An official comment, appended for no discernible reason to another section(Comment 5 to UCC 2-503), said that the draftsmen had "the specific intention of negating" the olderrule "that a term requiring the seller to pay the freight or cost of transportation to the buyer is equivalentto an agreement by the seller to deliver to the buyer...."

45 UCC §§ 2-319-2-324."' UCC § 2-320. Further detailed provisions on the form of bill of lading in C.I.F. contracts are set

forth in § 2-313. E.g., contrary to the rule where the quotation is "F.O.B.," a "received for shipment"bill of lading will do; detailed rules are also provided on the consequences when bills of lading areissued in sets and one part is missing.

THE UNIFORM LAW ON INTERNATIONAL SALES 341

matters discussed in the last paragraph. Should the ULIS have attempted to setforth the course of performance contemplated by various types of trade terms? Thequestion is difficult, but I incline to the view that ULIS chose the wiser course.

One crucial question is the extent to which the details of performance expectedunder various forms of price quotation are now standardized, or can become stan-dardized under the influence of international enactment. It is doubtful that studieshave been made to provide an answer to this question. This alone may decide thequestion, for one cannot responsibly launch detailed statutory provisions on theinternational scene in ignorance of their impact on practices applicable to a myriadof commodities in countless remote trading and shipping centers. The study by theInternational Chamber of Commerce that preceded promulgation of Incoterms 47

showed significant deviations; the extent to which these have been ironed outby traders' use of Incoterms is unclear. The initial formulation of Incoterms of 1936

was revised in 1953, and investigation shows that further refinements may be needed.The Standard Conditions of Sale (i.e., form contracts), drafted under the auspicesof the United Nations' Economic Commission for Europe, have disclosed that differ-ent understandings are current in trading in different commodities even withinEurope.48 And it must be remembered that both Incoterms and the ECE StandardContracts are prepared for voluntary acceptance; a much higher degree of restraint isneeded for the promulgation of a statutory norm from which traders can escape onlyby express contractual provision or by proof of an overriding course of dealing ortrade custom.

The above conclusions are tentative, based on doubt and surmise. But there isone final consideration, on which the writer has little doubt. The drafting of adetailed definition of trade terms and trade practices should not be committed toa diplomatic conference convened to prepare an international convention. Addeddetail, particularly of a technical nature, multiplies the danger of mishap in votesof governmental representatives. The diplomatic conference of 1964 was steeringuncomfortably close to chaos; multiplying the detail would surely have carried theconference over the verge. True, there is need for greater help to unify the rules forthe more specific steps in contract performance. Happily, there are ways to this endthat need not involve the cumbersome machinery of a diplomatic conference andan international convention 9

3. Remedies. What should be the objective and design of statutory rules onremedies for breach of the sales contract? What is the relationship of rules onremedies to those on warranty and risk?

From one point of view, rules on remedies-like the rest of sales law-are merely1 INTERNATIONAL CHAMBE- OF COMMERCE, TRADE TERs (I953)." Cf. Michida, Possible Avenues to Preparation of Standard Contracts for International Trade on a

Global Level-a paper presented at the September 1964 Colloquium of the International Association ofLegal Science, to be published in HoNNOW (En.), UNIFIcATION OF THE LAw GOVERNING INTERrATIONA.StaLs oF Goons (Paris, 1965).

- See infra at note 83.


designed to implement the transaction created by the parties. Under our domesticlaw the parties, within wide limits, can by agreement control the remedies availableon breach;5" under the Uniform Law on International Sale that choice is wideindeed. 1 However, statutory provisions on remedies play a different and largerrole than do provisions on warranty, or even rules on risk of loss. Merchants makinga sales transactions normally think even less of remedies for breach than of risk ofloss; except for trades with highly developed form contracts the agreement willprobably be silent. Nor do the standard definitions of trade terms-Incoterms orthe Revised American Foreign Trade Definitions-deal with the important questionsof remedies. Even course of dealing and usage of trade are relatively unhelpful.To be sure, on occasion it has been possible to develop proof of trade usage concerningthe adjustment of grievances.52 However, it is much more difficult to find a setpattern on adjustment of grievances than to find the pattern of expected normalperformance. Rules of law on risk thus play a relatively important role, and severalimportant issues call for statutory resolution.

(a) Style and approach of remedy provisions. In dealing with warranty and

risk, as we have seen, ULIS employs an approach that is simple and restrained--evenclassic; its rules on remedies are Byzantine in their complexity. This is justified onlyin part by the difficulty of the underlying problems; complexity was enhanced bya scheme of organization which was designed for clarity but was productive pri-marily of bulk.

The scheme needs to be grasped by anyone who works with ULIS. It is this:various aspects of the parties' performance are set apart for separate treatment, and

5o UCC § 2-718(): "Damages for breach may be liquidated in the agreement but only at an amount

which is reasonable in the light of . . ." several specified considerations. UCC § 2-719(1) (a): "the agree-ment may provide for remedies in addition to or in substitution for those provided in this article , . . "subject to limits prescribed in subsections (2) and (3) where circumstances cause an exclusive or limitedremedy "to fail of its essential purpose" or where the limitation of consequential damages is "un-conscionable."

51 ULIS art. 3 (quoted supra note 21) gives the parties complete freedom "to exclude" the applica-tion of the Uniform Law "either entirely or partially." Thus the contract may withdraw (and pre-sumably may limit) the specified remedies. Whether the parties may extend the remedies prescribed inULIS is less dear. The Uniform Law gives the parties full freedom by contract to override the provisionsof ULIS with respect to the various aspects of performance of the contract. ULIS arts. 18, 19(1), 33138( 4 ), 56, 69. None of these authorizations explicitly extends to remedies. However, ULIS art. 9(1) (aspart of chapter II entitled General Provisions) states: "The parties shall be bound by any usage whichthey have expressly or impliedly made applicable to their contract and by any practices which theyhave established between themselves." Since usage and course of dealing may bind the parties in anyrespect (including rules on remedies) and since the explicit basis for this result is an express or impliedagreement of the parties, it would be grotesque to conclude that ULIS intends to interfere with thefreedom of the parties in any respect. Cf.: ULIS art. 16; SALEs CoNvENTioN art. VII(i) (limitation onobligation of court to decree specific performance).

The Uniform Law's acceptance of contractual freedom is further emphasized by article 8 (quotedsupra note 26) which provides that the Uniform Law is not concerned "with the validity of thecontract or of any of its provisions. . . ." By the same token, national rules on the invalidity of agree-ments concerning remedies, as well as other matters, may still be applicable to international transactionssubject to ULIS. Cf. Articles 15 and 17.

" Cf. Schipper v. Milton, 51 App. Div. 522, 64 N.Y.S. 935 (ist Dep't xgoo), affirmed sub nom.,Smith v. Milton, 169 N.Y. 583, 6z N.E. 1oo (i9o); Burton v. Jennings, x85 F. 382 (2d Cir. 19xi).

TIlE UNIFORm LAW ON INTERNATIONAL SALES 343

remedies are separately stated for each type of performance. Thus, ULIS, in fourarticles (20-23), lays down rules on the time and place for delivery of the goods.These provisions on the seller's substantive obligations are followed by fourteenarticles dealing with remedies arising out of failure to perform these obligations: twoarticles (24-25) dealing jointly with date and place; four long articles (26-29) dealingspecifically with remedies for default as to date of delivery, and three long articles(30-32) dealing specifically with remedies for default as to place.

A sharp knife was needed for this fine slicing of the seller's obligations as to timefor delivery from his obligations concerning place of delivery. If the goods arrivelate, one could either say that at the right time they were at the wrong place (enroute); or that they got to the right place, but too late. Indeed for most situationsit is difficult to think of breach arising simply from the presence of goods at thewrong place, unless the time for their delivery has also expired.P3 Certainly it is notsurprising that separate development of remedies for these two aspects of performanceled to duplication and unnecessary bulk. It is this approach that accounts for thefact that a uniform law laying down only a handful of important policy choices never-theless runs on to ioi articles of statutory text. It is just possible that admirers ofDescartes overlooked the fact that breaking a problem into small pieces for closescrutiny was only one step in the Method, which includes also a synthesis of theseparate parts.

(b) Rejection. Much of the bulk of the Uniform Law-and considerable ex-penditure of time at the diplomatic conference-resulted from the attempt to dealin detail with the scope of the buyer's remedy of rejection. This problem is of

special importance in international transactions, for time and space separating sellersand buyers render it wasteful for sellers to redispose of goods rejected at the point

of destination.

The problem is a stubborn one. Varying degrees of non-conformity in an almostinfinite variety of situations have made the sweeping pro-rejection rules of theUniform Sales Act seem harsh, while the complex distinctions of the Uniform

Commercial Code appear casuistic.

What is the policy of ULIS on the remedy of rejection? In brief, the Uniform

"The reciprocating relationship of place and time was exposed in the following complex language ofULIS art. 30-X: "Where failure to deliver the goods at the place fixed amounts to a fundamental breachof the contract, and failure to deliver the goods at the date fixed would also amount to a fundamentalbreach, the buyer may either require performance of the contract by the seller or declare the contractavoided .. "

To be sure, the concept that the goods may be "delivered" to the buyer on shipment may make thewrong place for this type of "delivery" relatively insignificant if normal shipment brings the goods tothe buyer's place of business at the expected time. But this is a conceptual problem of the act's owncreation that, as we shall see, leads to other difficulties.

"' Further duplication resulted from the separate statement of buyer's remedies for seller's failure todeliver conforming goods. UUIS arts. 41-49. Various types of breach by the buyer are also givenseparate treatment: non-payment (arts. 6x-64); failure to take delivery (arts. 66-68); miscellaneousunclassified breaches (art. 70).

" Honnold, Buyer's Right of Rejection, 97 U. PA. L. REV. 457, 46o-6r, 472-79 (1949).

344 LAw AND CONTEMPORARY PROBLEMS

Law substantially restricts buyer's right to reject because of seller's breach relativeto time (or place) of delivery while preserving a broad right to reject goods whichdo not conform to the contract.

Discussion of the provisions of ULIS requires first a brief introduction to itsterminology. The remedy we call rejection is termed "avoidance of the contract";avoidance ordinarily requires a "declaration" by buyer; but sometimes happensautomatically and is then called "ipso facto avoidance of the contract.""0

Delay. Equipped with the Law's terminology, we can work with this problem:In an international sales transaction, seller is late in tendering the goods. May thebuyer reject? Sometimes, but not always. Under the Uniform Law buyer may"declare the contract avoided" when "the failure to deliver the goods at the datefixed amounts to a fundamental breach of the contract.'5 7 Obviously, the key ques-tion is: What is a "fundamental" breach? ULIS answers this basic question bystating that

a breach of contract shall be regarded as fundamental whenever the party in breach knew,or ought to have known, at the time of conclusion of the contract, that a reasonable personin the same situation as the other party would not have entered into the contract if he hadforeseen the breach and its effects.58

Anyone who had the patience to read the foregoing definition carefully will havenoted that it is a stew with many ingredients. Let us sort them out. A breach is"fundamental" if (i) a hypothetical "reasonable person" in the situation of theaggrieved party; (z) foreseeing the breach and its effects; (3) would not haveentered into the contract; and (4) this decision on behalf of the innocent partywas foreseen or foreseeable by the other party at the time of the making of thecontract. Projecting these reciprocating states of mind by hypothetical parties callsfor a lively imagination. Even more imagination is needed to suppose that thesevarious ingredients will be useful in deciding cases, for the realistic considerations arevery different, and surely include factors such as these: Will monetary compensationfor any breach fully compensate the wronged party? Is the amount of compensationsubject to dispute? Is the payment of such compensation assured?"0 The mostthat can be said for the Uniform Law is that the statutory test is sufficiently airy topermit consideration of the relevant factors, to which an arbitrator would probablyturn instinctively once he feels that the rule of law permits a flexible approach to theproblem.

In one setting, ULIS withdraws its flexible approach. Default as to time underarticle 38 is always "fundamental" when "a-price for such goods is quoted on amarket where the buyer can obtain them." This provision was prompted by the

5' Problems presented by this terminology will be discussed -at notes 70-73 infra.1 UUIS art. 26(1). Emphasis has been added throughout.ULIS art. io.Op. cit. supra note 55 at 468-472 (1949).

THE UNIFoP.mi LAw ON INTERNATIONAL SALES 345

view that raw commodities-which often are traded on an exchange-are subjectto price fluctuations which may make delay particularly important.0 ° Unhappily,this attempt to be specific may engender more doubt than it removes. The term"market" is undefined and difficult to apply; 6' nor does the availability of substitutegoods relate to the substantiality of seller's breach."

A second, and much more important device is used to bring precision to thisdifficult area: the famous German institution of Nachfrist-the establishment of a

deadline through a notice by the waiting party. Here, ULIS is simple, intelligibleand powerful. Even though seller's delay is not a fundamental breach, under article27(2) "The buyer may however grant the seller an additional period of time ofreasonable length. Failure to deliver within this period shall amount to a funda-

mental breach of the contract." The attractions of the rule are these: (i) The selleris given advance warning that dire consequences will follow his default beyond thestated day; (2) The discretion given to the buyer to fix the deadline-subject only

to the requirement that it be "reasonable"-brings some precision to an otherwise

foggy field.Non-conformity of the goods. As was noted before, the limited rejection per-

mitted for seller's default as to time (and place) must be contrasted with muchstronger remedies where the goods do not conform. Unhappily, the Uniform Law'srules are here cast in particularly complex form; the curious reader will find themin the footnote. 3 But the sections seem to boil down to two fairly workable ideas.

First: Regardless of the seriousness of the defect in quality, seller may cure his tenderby providing conforming goods so long as any delay does not constitute a funda-

" Special Commission appointed by The Hague Conference on the Sale of Goods, Report of the

Commission (on the 1956 Draft) (The Hague, 1963, Doc./V/Prep. i) 41."1 To reduce the elusive nature of the concept of a "market," the reference to prices "quoted on a

market" may be taken as referring to an exchange-an expedient that is subject to embarrassment in thelegislative history. ULIS (1956 Draft) art. 3 referred in paragraph i to a "market," whereas paragraph2, later deleted, referred to an "exchange"--thus providing grounds for contending that the two termsare not identical.

"Injecting the qualification concerning the availability of goods to the buyer may have resulted fromthe fact that "avoidance" of the contract not only cuts off the power of the party in breach to makean effective tender, but also terminates the right of the innocent party to obtain specific performance.See text at note 73 infra.

05 ULIS art. 43 provides: "The buyer may declare the contract avoided if the failure of the goodsto conform to the contract and also the failure to deliver on the date fixed amount to fundamentalbreaches of the contract. The buyer shall lose his right to declare the contract avoided if he does notexercise it promptly after giving the seller -notice of the lack of conformity or, in the case to whichparagraph 2 of article 42 applies, after the expiration of the period referred to in that paragraph."

ULIS art. 44 provides: "i. In cases not 'provided for in article 43, the seller shall retain, after thedate fixed for the delivery of the goods, the right to deliver any missing part or quantity of the goodsor to deliver other goods which are in conformity with the contract or to remedy any defect in thegoods handed over, provided that the exercise of this right does not cause the buyer either unreasonableinconvenience or unreasonable expense.

2. The buyer may however fix an additional period of time of reasonable length for the furtherdelivery or for the remedying of the defect. If at the expiration of the additional period the sellerhas not delivered the goods or remedied the defect, the buyer may choose between requiring the perfor-mance of the contract or reducing the price in accordance with article 46 or, provided that he does sopromptly, declare the contract avoided."

346 LAw AND CONTEMPORARY PROBLEMS

mental breach, under the rules on lateness just discussed. Second: If the goods failto conform in a minor ("non-fundamental") respect, must the buyer accept or retain

them and be satisfied with price adjustment or damages?04 The answer is No.Again the Nachfrist (or deadline) device is provided. Under article 44(2), thebuyer may "fix an additional period of time of reasonable length"; if the seller fails

within that period to provide conforming goods the buyer may "declare the contractavoided." 5

Evaluation of rejection provisions of ULIS. Some words of praise and criticism

slipped out in the course of describing the provisions. In attempting an overall

evaluation of this part of the Uniform Law, let us consider first substance and thenform.

In view of the fact that in enterprise so widely shared no one can have his heart's

desire, the Uniform Law's rules on rejection seem to respond fairly to the essentialinterests at stake. A difficult choice has to be made in deciding whether to limit

the remedy of rejection; I have elsewhere given reasons for concluding that autho-

rizing rejection for any deviation from the contract is inconsistent with commercialpractice and leads to illusory results in adjudication. 6 The Uniform Law seemsto have moved in the right direction-particularly in view of the opportunity to usethe Nachfrist notice to close out the transaction.

On the other hand, the style of this part of the Uniform Law is regrettable.

The structure is needlessly complex and confusing. In addition, for reasons that will

be developed more fully in the pages that follow,62 the basic concept of "avoidanceof the contract" is an awkward and dangerous tool for this difficult and intenselypractical problem of rejection.

(c) Notice of damage claim and of rejection of the goods. One of the leastattractive features of the Uniform Law for International Sales is its handling of these

two problems: (i) Goods in the buyer's possession prove to be defective. The buyerproposes to keep the goods and claim damages from the seller. How fast must the

buyer notify the seller to prevent loss of his claim? (2) Instead of keeping the de-

fective goods, the buyer proposes to reject them. What notification must be given

seller to transfer to the seller the burden of handling the goods?The underlying problems posed by these two situations are only superficially

similar. In the first, the requirement of notice responds to the seller's need to

gather evidence of the condition of the goods in order fairly to meet the buyer'sclaim. In the second case, the seller needs notice of rejection so that he can take

"We are here assuming that the deviation, although minor, is a real non-conformity: that is, underthe rule of ULIS art. 33(2) (quoted supra in the text preceding note 34), the deviation is not too im-material to be "taken into consideration."

O The rigors of rejection even with respect to non-conforming goods are relaxed by article 45 whichpermits rejection only of the non-conforming goods. Cf. ULIS art. 47 (if seller tenders too much,buyer may reject "the excess quantity").

"Supra note 55.17 See text at notes 70-73, inIra.

THE UNniOlu% LAW ON INTERNATIONAL SALES 347

immediate steps to reship or resell the goods and thereby avoid deterioration, storage

costs and other unnecessary costs and risks. The issues seem prosaic but they are

important; the failure to give notice required by law can be disastrous. Unhappily,the Uniform Law's provisions can lead to technical objections to just claims.

We start with the basic and seemingly flexible rule of ULIS that the buyer "shalllose the right to rely on a lack of conformity of the goods if he has not given theseller notice thereof promptly after he has discovered the lack of conformity or oughtto have discovered it." 8 Difficulty arises only because of a chain of technical rulesgoverning the time within which a buyer "ought" to discover defects. Article 38-2

states: "In case of carriage of the goods the buyer shall examine them at the placeof destination." But in many situations-and especially in dealing with goods which

are sealed in cans or tightly crated-it may be more efficient to delay any inspection

until after the goods have been reshipped by the buyer to a point of consumptionor to a sub-purchaser. The Uniform Law does not overlook the problem, but the

tolerance allowed is very narrow. Article 38(3) permits delay in inspection until

arrival at the new destination only if "the seller knew or ought to have known, at thetime when the contract was concluded, of the possibility of such redispatch. .. ." Such

strict limits might be appropriate to restrict rejection at an unexpectedly remotespot, but they can hardly be justified in barring a claim for monetary adjustment for

defective goods. At this point ULIS makes the common error of laying downdetailed rules that fail to fit the complex facts of commercial life.69

In dealing with rejection-when the other party needs to take prompt action-ULIS unfortunately drifts off into language of metaphysical obscurity growing

out of the concept of "avoidance of the contract." "Avoidance" is not at all what

one would expect: it is a remedy given for breach and does not bar the recovery ofdamages7 Unhappily, the term covers various legal consequences, two of which

"ULIS art. 39(I). ULIS uses two general terms to specify time for action: "promptly" (dans unbref dM1ai), and "within a reasonable time" (dans un dMlai raisonnable"). "Promptly" was used whenmaximum speed was required. Article ii defines "promptly" as calling for action "within as short aperiod as possible, in the circumstances, from the moment when the act could reasonably be performed."Cf. USA § 49; UCO § 2-607(3)(a) ("the buyer must wtihin a reasonable time after he discovers orshould have discovered any breach notify the seller of breach or be barred from any remedy").

Delegates to the 1964 convention will not soon forget the battles over the terms; a humorous andbrilliant poem that was part of the heritage from the diplomatic conference of x951 reveals that thisproblem was troublesome even then. Unhappily, the smoke from the battle over the definition of theterms may have obscured more important issues.

" The UCC-which sometimes is designed with excessive detail where ULIS is built on classic lines-here provides the more wholesome example. UCO § 2-602(l): "Rejection of goods must be within areasonable time after delivery or tender. It is ineffectual unless the buyer seasonably notifies the seller."The greater speed called for in some rejection situations is provided by the all-embracing test of UCC§ 1-204(2): "What is a reasonable time for taking any action depends on the nature, purpose and cir-cumstances of such action."

7°ULIS art. 78-1: "Avoidance of the contract releases both parties from their obligations thereunder,subject to any damages which may be due." Relief from damage because of some excuse (in traditionalterms, impossibility or force majeure) is termed an "exemption" (in the French text, exoneration) and isdealt with in article 74-


are predominant. On "avoidance" the injured party (i) loses the remedy of specificperformance, and (ii) is relieved of the duty of accepting the goods.71

Further complication results from the fact that there are two types of "avoid-ance": (i) a declaration of avoidance (which gives notice to the other party) and(2) an automatic (non-notification) type of "avoidance." The latter, in the Frenchtext, is expressed in the legal idiom "rsolution de plein droit" which, in desperation,the "English" text renders into Latin as "ipso facto avoidance."

This latter automatic, non-notification "ipso facto avoidance" may in some situa-tions deny the other party information needed for important action. The varietiesand consequences of this type of avoidance are complex, and are buried in a foot-note72 However, enough has perhaps been said to explain the writer's unhappinesswith the structure and style of this part of the Uniform Law. The Observations ofthe United States, presented shortly before the opening of the Conference, expresseddisappointment over this and similar concepts which were complex legal constructsrather than references to the events of commercial life.7

1 One of the great opportuni-ties of a uniform law for international use is to provide a clear, common languageof discourse for the development of an international law merchant. A new interna-tional language would miss a great opportunity if it employed irregular verbs andEnglish non-phonetic spelling. Unhappily, as we have seen, the drive to bring theConvention and Uniform Law to completion in three weeks barred any attention tothe workability of the draft's basic concepts.

(d) Other significant provisions. Reference can only briefly be made to a fewother significant aspects of the Uniform Law: a duty even by the innocent partyto take feasible steps to preserve the goods;74 a power to suspend performance whenthe economic situations of the other party appears to have become so difficult that

"' In jurisdictions where specific performance is theoretically generally available, it has been thoughtimportant to end the injured party's right to specific recovery when the party in breach loses his powerto tender the goods, so that neither can speculate at the other's expense. In view of the rarety ofrecourse to specific performance, this concern is of greater theoretical (or aesthetic) than practical value.In Anglo-American jurisdictions the problem is avoided by the discretionary nature of the remedy: abuyer who elected specific performance late after a rise in the market would probably be barred, interalia, by the doctrine of laches.

" lpso facto avoidance arises in various situations: Under ULIS art. 25, when seller fails to deliver,the "buyer shall not be entitled to require specific performance of the contract by the seller, if it is inconformity with usage and reasonably possible for the buyer to purchase goods to replace those to whichthe contract relates." In this case, "the contract shall be ipso facto avoided as from the time whensuch purchase should be affected." Under ULIS art. 26(1), if the buyer fails to notify seller of hiselection between specific performance and avoidance of the contract "within a reasonable time," the"contract shall be ipso facto avoided." In this latter situation reasonable notice may be assured in somecases under ULIS 26(3): if the seller has "effected delivery" (which may include delivery to a carrier)"before the buyer has made known his decision" and "the buyer does not exercise promptly his right todeclare the contract avoided, the contract cannot be avoided." There are parallel provisions on placefor delivery in Article 3o. But cf. ULIS arts. 6z, 62.

' Observations and Amendments Submitted by the Government of the United States of America(Doc./V/Prep./8, Feb. z, x964) 2-3. Cf. Compilation of the Observations and Amendments Submittedby the Governments and the International Chamber of Commerce (Conf./Gen/5) 47a, 8o-8a.

7 4 ULIS arts. 91 and 92. Cf. UCC § 2-603. Merchant Buyers Duties as to Rightfully RejectedGoods.

THE UNIFoRiu LAW ON INTERNATIONAL SALES

there is reason to fear non-performance; 75 the overruling of statutes of frauds andcomparable formal requirements 76 There are, of course, many other interestingprovisions among the ioi articles of the Uniform Law; the most that one can hope(in line with commercial practice in examining goods) is that we have taken a fairsample as a basis for evaluation.

III

CONCLUSIONS AND UNANSWERED QUESTIONS

A. ULIS: An Evaluation

An evaluation of the Uniform Law calls for a judgment combining many elusivefactors. The successful parts of the Draft need to be balanced against those defectswhich exist in any human creation-and especially appear in any human's evaluationof another's creation. A fair evaulation of the Law's strengths and weaknesses is

hard enough, but that is only the beginning of the problem. Is this Law-howeverflawed-less imperfect than the present chaos? What are the chances that furthereffort would produce a better result? Would the adoption of the present UniformLaw inhibit significant improvement of the structure?

A confident answer to a problem with so many variable and unknown elementswould establish only the writer's dogmatism. For better or worse, however, choices

must be made. Here are two hypotheses: (i) Although the Uniform Law in Inter-national Sales is a disappointing effort, in time it could produce a modest improve-ment in the present unsatisfactory state of the law-primarily through the develop-ment of an international jurisprudence with a common idiom and frame of refer-ence. (2) In view of the quickening interest in the project and deepening under-standing of its problems, further work on the Uniform Law should lead to sig-

" ULIS art. 73. See also art. 76 giving a right to declare the contract avoided when, prior to thedate for performance, "it is clear that one of the parties will commit a fundamental breach of thecontract." Cf. UCC 2-6o9. Right to Adequate Assurance of Performance; UCC 2-61o. AnticipatoryRepudiation.

"' ULIS art. X5: "A contract of sale need not be evidenced by writing and shall not be subject toany other requirements as to form. In particular, it may be proved by means of witnesses." ContrastUSA § 4; UCC § 2-201. Formal Requirements; Statute of Frauds. Following recommendations of theLaw Revision Commission, Parliament repealed the statute of frauds provisions of the British Sale ofGoods Act. Law Reform (Enforcement of Contracts) Act, 1954, 2 & 3 Eliz. 2, ch. 34, 34 Halsbury'sStat. (2d ed.) 97-

Also worthy of mention is the provision that on the expiration of a year following notice of lackof conformity of the goods, the buyer shall "lose his right to rely" thereon. ULIS art. 49(). Thequoted language was deliberately chosen to extinguish the buyer's substantive right, with the expectationthat a forum in a nation that had not adopted ULIS but referred to the substantive law of an adoptingnation would apply this one-year period rather than the forum's statute of limitations. Curiously, theUniform Law specifies no time limit for the seller's right to recover damages from a buyer-as forwrongful rejection in a falling market. At the September 1964 colloquium of the International Associationof Legal Science, Professor Trammer of Poland presented a draft convention to unify rules on lapse oftime in international sales of goods. Trammer, Time Limits for Claims and Actions in InternationalTrade. See also Harris, Time Limits for Claims and Actions. These papers will be published as part ofthe proceedings in HONNOLD (ED.), UNIFICATION OF THE LAw Govs"RNiNo INTERNATIONAL SALES OF GOODS(1965). The Colloquium agreed that the problem deserved attention and referred the matter to theRome Institute.


nificant improvement. It seems wise to make an added effort to improve the lawbefore putting it into force.

It is not the presence of questionable decisions of policy in the Uniform Law thatpushes this writer regretfully over the brink into counselling further work and delay.And certainly it is not the silence of ULIS on many problems that arise in interna-tional practice. As the reader will have perceived, my most serious reservations relateto matters that some might dismiss as mere style or art: complexity and technicalityof some parts of the Uniform Law, and the use, at critical spots, of conclusoryterms related to local legal idioms rather than standard events of commercial life.

One symptom of this problem has been the difficulty of translating some of theLaw's crucial terms. We have already met the desperate rendition of resolution deplein. droit into "ipso facto avoidance," and have glimpsed some of the difficultiesof working with this concept7 Difficulty with the Law's key concept of dMlivrance-so plausibly (and deceptively) rendered as "delivery" has been discussed elsewhere;the difficulty reappeared in attempting to translate the concept into languages otherthan English s I need only add that the term plagued the final drafting process, sothat even those who had struggled with the draft for years had trouble differentiatingthe conceptualized dLlivrance (translated "delivery") and the commercial eventwhich in the French text is called remise and in the English text is described, inpictorial language, as "handing over." It is possible to acquire a refined taste forthe elegance of some of these nuances, as for esoteric forms of the French subjunctive,but one would not commend this style for effective translation and comprehensionin the varied legal (and linguistic) settings of the world.

The use of the complex, conclusionary legal idiom of "property" led to con-fusion in Anglo-American sales law; a comparable difficulty infects parts of theUniform Law. For comprehensibility in various languages and local legal settings,the concepts need to be kept simple and closely tied to commercial life, so that wordsfor the ideas exist in various languages because the underlying practice exists, andmust be described wherever commerce is discussed. In many parts, the UniformLaw meets this painfully exacting standard; at crucial spots it needs reexamination.

Can improvement of this nature be made after the Uniform Law is put into force?In spite of the awkwardness of recourse to the machinery of diplomatic conferenceand treaty revision, it may be possible to correct egregious errors of limited scope"0

" See text accompanying notes 70-73 supra."'Honnold, A Uniform Law for International Sales, 107 U. PA. L. REv. 299, 317"320, 324-326

(z959). The difficulty encountered in translating delivrance into languages other than English appearsfrom Coordination des Traductions du Projet de Loi Uniforme Sur la Vente Internationale des ObjetsMobiliers Corporels 2, 3 (U.D.P. 1957-Etudes IV, Vente-Doc. ios) (May 1957) (mimeo).

T" If ULIS goes into force, three years thereafter a conference to revise the Convention or the UniformLaw may be convened on request by one quarter of the contracting states. SALES CoNVENTION art. XIV;CoNVrror oNr FO1MATION art. XII; Cf. Final Act of the Diplomatic Conference, Recommendation I(2):If the Sales Convention has not come into force by May 1, 1968, the Rome Institute should establish acommittee composed of representatives of the Governments of interested states to "consider what furtheractions should be taken .. "

THsE UNIFoRM LAwv ON INTERNATIONAL SALES

But matters concerning key concepts will be much more difficult-probably im-

possible-to modify once the system is under way.

The care and approach in the preparation of the project should reflect one's

hopes concerning the scope of possible utilization. The Uniform Law (throughdefault) has been of European design, but it moves towards meeting a need ofworld-wide dimensions. True, one might conceive of a series of regional approaches

to unification: a European draft, the implementation of a pending Inter-Americandraft, 0 the preparation of still further drafts for Asia and Africa. Regional ap-proaches may indeed be necessary for intimate social or economic integration, but

a uniform law for international sales does not disturb such delicate national interests.

The prime functions of this uniform law are to provide firm legal underpinning forengagements voluntarily made, and to dispose of unresolved issues clearly and in

conformity with the customs of international trade-factors not closely related to

the traditions and idioms of domestic legal systems. Indeed, the wider the gap be-

tween the legal systems of the traders, the greater the need for a uniform law.

The need is for nothing less than a uniform law suitable for world-wide use-

a breath-taking opportunity that creates peculiar and exacting problems of designand draftsmanship. In this rapidly shrinking world, we need not fear that the

project will languish and die if it is not immediately put into force. The projectneeds further work, and the importance and difficulty of the problems justify the

extra effort.Any American suggestion for delay, after almost four decades of indifference, is

likely to be misconstrued. I do trust that no one would harbor a suspicion of Fabian

warfare against the uniform law by those of us who have keenly supported theproject over the years. Nor would it be plausible to suppose that the United States

or any other trading nation has any interest other than the preparation of the bestpossible uniform law.s ' The more plausible suspicion is that we might like to keep

the project open so we can get more of "our law" into the draft.

No one who has thought very long about international unification of law would

bring to this creative work a trading psychology like that used in a tariff negotiation:We'll take some of your "foreign" law if you'll buy a substantial shipment of ourAmerican products-and most especially a large order of our new, big, shiny Uni-

form Commercial Code. The adoption of such an approach by all interested nations

would probably lead to an impasse and, at best, would produce a Hydra-like monsterof terrifying complexity.

" For discussion of early phases of the project prepared by the Inter-American Judicial Committee seeKuhn, Draft of an Inter-American Uniform Law on International Sales, 48 Am,. J. INT'L L. 126 (1954);cf. Schroeder, An Inter-American Uniform Commercial Code, 2 W. REs. L. REv. 42 (i95o). For a laterdraft and accompanying report, see INTER-AmERICAN JURIDICAL CoMMITTEE, DRAFT CoNEvrrION ON AUNIFORM LAW ON THE INTERNATIONAL SALE OF TANGIBLE PERSONAL PROPERTY (Organization ofAmerican States, 196o).

" See Report of the Delegation of the United States of America on the Unification of Law Governingthe International Sale of Goods, The Hague, in NATIONAL CONFERENCE OF CoMMISSIONERS ON UNIFORMSTATE LAWs, [1964] HANDBOOK AND PROCEEDINGS 237 et seq.


B. Structural Problems

Experience with ULIS illustrates basic organizational problems concerning fur-ther work on international unification of law. A solution cannot be attempted here,but the problems need to be faced without further delay.

What is the most effective channel for United States participation in the manypending projects for unification of law? Surely we cannot afford again to rouseourselves only on the eve of a decisive diplomatic conference. Effectiveness requiresinformed, consistent work during the years (or decades) while a project is in gesta-don-not only to help insure that the finished product will meet our needs but alsoto develop that degree of understanding and feeling of participation necessary fora fair decision about adoption.

Communications from other governments and requests for comments about pend-ing drafts come to the State Department; that Department necessarily controls therepresentation of this country at diplomatic conferences. The State Departmentshould have the responsibility to organize the work that needs to be done. Thenature of the work, however, is different from that customarily handled by the StateDepartment. It is long-range, scholarly and, for the most part, non-political; anorganizational unit needs to be established that is qualified and oriented for thiswork. In view of the ebb and flow of changing subjects of international legalcollaboration, the Department will need to rely in large part on outside specialists;but the Department needs adequate full-time personnel with the time and back-ground necessary to follow the work, to convene qualified working parties, and toshare in recommendations about United States adherence to the final product. Newadministrative (and budgetary) arrangements are needed as we emerge from our pastlethargy and ignorance with repect to long-range, non-political legal developmentson the international scene. s2

There are also problems of organization and coordination at the international levelthat need to be mentioned briefly to put the current project into perspective. Uni-form legislation is only one of two complementary techniques to smooth the legalpaths of international trade. A second is the development of standard -.Untractsthat, when well prepared, constitute specialized codes for the type of commodityat hand. The United Nations Economic Commission for Europe has donepioneer work in the preparation of standard contracts for the sale of specific com-modities; the success of these contracts for European trade has demonstrated thedesirability of expanding this work. As in the preparation of the Uniform Law onInternational Sale, Europe has led the way; but the need for standard contracts,like the need for uniform legislation, is not confined to a single region. LastSeptember's colloquium of the International Association of Legal Science explored

12 The problems of staffing a delegation adequate to deal with the exacting demands of a diplomaticconference were suggested in the text at notes 11-17 supra.

THE UNiFont LAw ON INTERNATIONAL SALES 353

the wider opportunities of such contracts as an aid to unification;85 there remainsthe development of an appropriate institutional vehicle for carrying this workforward-possibly within the U.N. Secretariat or within the Conference of Tradeand Development.

This work on standard contracts has significance which brings us back to ourprimary theme, the development of uniform law. The further crystallization ofinternational commercial practice in the preparation of standard contracts shouldenlighten any further work in improving the Uniform Law for International Sales,and should aid tribunals, under ULIS or any other legal regime, when they are calledupon to give effect to international commercial custom.

These wider vistas should help us see that further work is worthwhile, butshould not distract us from our most immediate problem: the creation of organiza-tional structures for effective United States participation in the developing work(by law or contract) to reduce the legal difficulties facing international trade. Per-haps the most effective catalyst for his work is the Advisory Committee on PrivateInternational Law established in 1964 by the Secretary of State.8 4 This Committeeshould authorize studies directed to these basic problems of organization, and lendthe weight to its judgment to concrete steps towards a solution. It would bedepressing to consider the impoverished state of our domestic law without theorganizational planning that produced the National Conference of Commissionerson Uniform State Laws and the American Law Institute. There is comparable needto construct institutions for effective work dealing with international legal unifica-tion.

, See note 48 supra.The Advisory Committee on Private International Law, under the chairmanship of the Legal

Adviser to the Department of State, includes representatives of nine of the nation's leading professionalorganizations and the Department of justice. See Report of the Delegation, supra note 8x.

the uniform law for the international sale of goods- the hague co

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